I love to travel. Especially to places where the language, culture and landscape are so different that my regular points of reference are no longer valid. Believe it or not, renovating or rebuilding can be similar. The problem is that most people don’t realize that they are venturing into a different world, and don’t take some of the precautions they would take if they were travelling abroad. Who would? The landscape hasn’t changed. The people continue to look the same. Yet, like when travelling, problems can arise because of reliance on everyday–but dangerous assumptions, misuse of lingo and cultural differences. Here are some examples of how this happens in the context of renovating or rebuilding.
Dangerous Assumption: Verbal quotes include HST
Ever gotten out of a taxi overseas to learn the quoted price was per person, not for the ride, like it is here at home?
It’s common for homeowners to think of budget talk in terms of final numbers, especially because taxes are never mentioned in popular shows like we see on HGTV. Homeowners go in with HST included in their home reno/rebuild budget in their minds, but the verbal quotes you receive from professionals generally do not include HST. Some homeowners who know this may simply fail to consider how much the HST can be on a renovation or rebuild project because day-to-day purchases are so much smaller.
In Ontario, not recognizing this issue can lead to a 13% shortfall on project funds. Given the large sums of money involved, this can be thousands of dollars. Just like when traveling somewhere new where you don’t know how the system works, the safest thing to do is not make assumptions. Verify the numbers you are working with include everything.
Misused Lingo: ‘Construction cost’ is not total cost of project
Ever bought an ‘all-inclusive’ tour package in a foreign city, only to discover that it really didn’t include everything. Maybe food, domestic drinks and lodging were included, but attractions, gratuities and airport transfers were not. I’ve learned that there’s always something extra.
Similar scenarios can arise during home renos/rebuilds. Everyday words like ‘construction’ and ‘cost’ can become troublesome when they are used together by homeowners in conversations with building professionals. ‘Construction cost’ has a very specific definition in the construction industry. While homeowners may think and use this term to describe all expenses associated with their project, building industry professionals will not. They define construction cost as the expense incurred by a contractor for labour, material, equipment, financing, services, utilities, etc., plus overheads and contractor’s profit. It does not include other expenses like architectural design, consultant and engineer fees.
The incorrect use of lingo can lead to poorly defined budgets and financial shortfalls. Ensure that you are using these terms properly by asking for a proper definition. This way, you will know exactly what you’re facing.
Cultural Difference: Project not finished by completion date
Ever heard the term ‘island time’? The Caribbean is lovely, but the locals operate at a different pace than we’re used to in Toronto. If you know this going in, you won’t mind so much when your umbrella drink takes 10 minutes to move from the bar to your table.
Some industries are more rigorous in meeting ‘deadlines’ and ‘completion dates’ than others. As a litigator I would never have missed a deadline for submitting court documents. Failure to do so could result in a malpractice claim against me! In the building industry, a reputation may be tarnished, but there’s little immediate financial impact to motivate contractors and trades to meet deadlines. While there are exceptions, meeting timelines seem to be less of a priority for them than it is for you. However, you should also be mindful that there are other things that can affect timelines.
Be aware of the term ‘substantial completion’. This is an important milestone for homeowners who finance their projects using a construction mortgage. It does not, however, represent the true completion of a project. Your bank and contractor might not worry about those missing towel racks and mirrors, but their absence in your substantially completed home will frustrate you.
If you’re aware of these cultural differences, you’ll be better prepared to deal with them. Make sure you have a fall back plan in case your project is not finished by the set completion date.
Sometimes you just need to hire a guide
Some people like to land in a foreign country with little research and simply wing it. They like the adventure of discovery, rely on their street-smarts and are willing to roll with the punches. But given the large budgets involved in renovation or rebuild projects, and how negatively financial or time-related setbacks can impact your whole family, reading a good guide book first, or better yet, hiring a guide can make a world of difference to your experience. I’d be happy to help, starting with a two-hour strategy session.